Guarantee Company of North America v. 1964907 Nova Scotia Ltd.

Guarantee Company of North America v. 1964907 Nova Scotia Ltd. Court Court of Appeal Date 1995-03-20 Citation 1995 NSCA 33 Docket CA 109876 Judge/Registrar/Adjudicator Chipman, David (Honourable Justice); Clarke, Lorne O. (Honourable Chief Justice); Matthews, Kenneth M., (Honourable Justice) Document Type Decision Decision Content C.A. No. 109876 NOVA SCOTIA COURT OF APPEAL Cite as: Guarantee Company of North America v. 1964907 Nova Scotia Ltd., 1995 NSCA 33 Clarke, C.J.N.S.; Matthews and Chipman, JJ.A. BETWEEN: THE GUARANTEE COMPANY OF ) NORTH AMERICA, a body corporate ) Wendy J. Johnston ) for the Appellant Appellant ) - and - ) ) Michael J. Wood ) Colleen Keyes 1964907 NOVA SCOTIA LIMITED, a body ) for the Respondents corporate, carrying on business under the ) firm name and style of S & V ELECTRIC; ) GUARDIAN INSURANCE COMPANY ) T. Arthur Barry OF CANADA, a body corporate; ) Meinhard Doelle 1680265 NOVA SCOTIA LIMITED, ) for Guardian Insurance a body corporate; THE CENTENNIAL ) GROUP OF COMPANIES LIMITED, ) a body corporate; ROCCA CONSTRUCTION ) Appeal Heard: LIMITED, a body corporate; HAYNES ) February 2, 1995 LALLY DALZIEL; and GRAYDON D. LALLY ) ) ) Judgment Delivered: Respondents ) March 20, 1995 THE COURT: Appeal dismissed from decision of chambers judge concerning the validity of a claim for mechanics' lien, per reasons for judgment of Clarke, C.J.N.S.; Matthews and Chipman, JJ.A. concurring. CLARKE, C.J.N.S.: This appeal relates to the enforcement of a security bond issued by the appellant (Guarantee) permitting the vacation of a claim under the Mechanics' Lien Act in circumstances where it is alleged by the appellant the lien claim was not perfected in accordance with the Act (Mechanics' Lien Act, R.S.N.S. 1989, c. 277). The respondent, Rocca Construction Limited, was the general contractor employed to construct Cambridge Suites, a hotel in Sydney. Stan's Electric Limited was the electrical subcontractor. The respondent Guardian Insurance Company of Canada issued a performance bond on behalf of Stan's Electric. When Stan's Electric defaulted in August, 1989, Guardian arranged for the electrical subcontract to be completed by S & V Electric. The hotel was certified as being substantially complete on December 15, 1989. Rocca refused to pay the balance owing S & V. Mr. Lally of the respondent law firm of Haynes Lally Dalziel was retained by S & V to obtain a mechanics' lien. This he did on January 29, 1990 by registering and recording at the Deeds office a claim for lien of $385,814.00. The respondent Guardian later took an assignment of S & V's lien rights. In February, 1990, Guarantee issued Rocca a bond for $400,000.00 which was posted with the Court. On February 7, 1990, upon application by Rocca, Justice S. J. MacDonald ordered the claim for lien vacated. The order provides in part: IT IS ORDERED THAT upon a Bond being issued by Guarantee Company of North America for Four Hundred Thousand ($400,000.00) Dollars and filed with the Clerk of this Honourable Court in the form attached as Schedule "A"; 1. The registration of the Claim for Lien recorded by the Defendant at the Registry of Deeds at Sydney, Nova Scotia in Book 1642 at Page 313 be and the same is hereby vacated pursuant to Section 28(4) of the Mechanics' Lien Act. 2. Any Certificate of Lis Pendens hereafter issued on behalf of the Defendant and recorded at said Registry is also fully vacated and discharged against the lands of 1680265 Nova Scotia Limited, and without further proof being required to clear title to such lands at the Registry of Deeds. AND IT IS DECLARED THAT certification of a copy of this Order by the Clerk is and shall be conclusive evidence that the original of the Bond referred to herein has been duly executed and is on file with the Clerk to be held by him subject to further Order of this Court. On March 8, 1990, Mr. Lally issued a statement of claim on behalf of Guardian (S & V). No lis pendens was filed. In all other respects the procedure followed by Mr. Lally complied with the statutory requirements of the Act. Guarantee applied to the Supreme Court for an order, (a) to dismiss proceedings brought by Guardian to recover under the lien bond, and (b) to discharge and return its bond. This application for relief was based on the failure of Guardian and its solicitor to register a certificate of lis pendens pursuant to ss. 25 and 26(1) of the Act. This gave rise to two issues. The first was whether Guardian had a valid lien. If it did not, then there was a second issue and that was whether Guardian could shelter under either one of two lis pendens that had been filed by two other subcontractors. The fact situation prompting the second issue is somewhat different from that described above. It will be dealt with later in this decision. While finding that the lien had not been perfected in accordance with the Act, the chambers judge nevertheless concluded that it was valid because it was preserved by at least one undischarged certificate of lis pendens. Under this, he determined Guardian could shelter. As a result he found Guarantee was obliged to respond to Guardian's claim. The First Issue - Has Guardian a valid lien? Section 26(1) of the Act provides: 26 (1) Every lien for which a claim has been registered shall absolutely cease to exist on the expiration of ninety days after the work or service has been completed or materials have been furnished or placed, or after the expiry of the period of credit, where such period is mentioned in the claim for lien registered, or in the cases provided for in subsection (5) of Section 24, on the expiration of thirty days from the registration of claim, unless in the meantime an action is commenced to realize the claim or in which the claim may be realized under this Act, and a certificate is registered as provided by Section 25. (underlining added) The certificate to which s. 26(1) refers is the lis pendens described in s. 25 which states: 25 Every lien for which a claim is not registered shall absolutely cease to exist on the expiration of the time hereinbefore limited for the registration thereof, unless in the meantime an action is commenced to realize the claim or in which the claim may be realized under this Act, and a certificate thereof (Form E) is registered in the registry office in which the claim for lien might have been registered. The argument of Guarantee in chambers was that mechanics' liens are a creation of statute, unknown to the common law, and that the procedural steps and requirements of the Act must be followed to the letter or else the lien "shall absolutely cease to exist". Counsel contended the law in Nova Scotia was settled in the decisions of Associate Chief Justice Palmeter, then Chief Judge of the County Court, in Lawrence v. Rodgerson et al. (1986), 77 N.S.R. (2d) 64 and C.G. Tech Ltd. et al. v. Cornwallis Realties Ltd. et al. (1991), 106 N.S.R. (2d) 383. Reference was also made to decisions rendered by courts outside Nova Scotia. Guardian adopted the position that the strict interpretation of the Act in these circumstances would impose on a lien claimant an unnecessary procedural step. It would serve no purpose except to create a non-existing and unreal cloud on the title of the land which the whole notion of vacation is designed to remove. Among others, counsel relied on the decision of the British Columbia Court of Appeal in Universal Supply Co. Ltd. et al. v. S. Radatske Construction Co. Ltd. (1972), 29 D.L.R. (3d) 251. After considering the submissions in some detail, the trial judge wrote: Although the reasoning in Universal is most persuasive, regarding the interpretation of s. 26(1), I find I am not so persuaded as to make a finding inconsistent with that of Lawrence and C.G. Tech. I reach this conclusion not only because of judicial deference for the decisions of the highest trial court with jurisdiction on the subject, but also because conflicting decisions may be confusing to those who practice in the area of mechanics' liens where certainty of procedure is particularly important. Better that this matter be resolved by a higher court at an appropriate time. I find that the Guardian Insurance lien therefore has not been perfected. On appeal the respondents Guardian and Haynes Lally Dalziel each contend by their notices of contention that the trial judge erred in concluding that there was a requirement on Guardian to file a certificate of lis pendens. The appellant argues that the trial judge was right in finding that the procedural non-compliance by Guardian was fatal to the perfection of its lien. The purpose underlying the statutory lien is to make available a benefit for those who provided services and materials in the construction of this hotel. To achieve this benefit the legislation sets forth a procedure whereby certain steps must be taken by claimants within specified periods of time. That being done a lien claim is established and upon registration it becomes a charge against or burden on the land. It creates an encumbrance on the title until the action giving rise to the lien claim is resolved and the charge against the land is removed. The Act provides a method by which the title to the land can be cleared of the lien claim before the validity of the claim is finally resolved among the parties. This is by posting security or paying into court the amount of the claim and obtaining a court order vacating the registration of the lien. The result is that the title of the land is restored. The action commenced by the lien claimant continues but it is transferred from the real property to the fund that replaces it. Often, the security posted with the court is in the form of a bond such as that issued by Guarantee in the instant case. The authority permitting the registration of a lien to be vacated by court order is found in s. 29(4) of the Act: (4) Upon application, the court or judge having jurisdiction to try an action to realize a lien, may allow security for or payment into court of the amount of the claim, and may thereupon order that the registration of the lien be vacated or may vacate the registration upon any other proper ground and a certificate of the order may be registered. The effect of an order vacating the registration of a claim of lien was discussed by this Court in Langevin Developments Ltd. v. Tri-Corp General Contracting and Sales Ltd. (1988), 87 N.S.R. (2d) 332. The Court stated at p. 336: [16] The effect of an order granted under s. 28(4) [now 29(4)], is to provide security for the amount of the lien by payment into court, or otherwise, and thereupon the registration of the lien is vacated. Such an order unburdens the title and permits the owner to get on with his business but at the same time protects the lien claimant so that he knows that the funds necessary to satisfy his claim are secure. If necessary, the lien claimant may still be put to the proof of his claim and any defences available to the owner will have to be met. [17] A significant feature of an order granted under s. 28(4) [now s. 29(4)] is that the judge may order that the registration of the lien be vacated. That is exactly what Judge Anderson did in the order he granted on November 21, 1986: the registration of the certificate of Tri-Corp's lis pendens was vacated upon the payment of money into court by the owner Langevin. At that point and thereafter, on the facts of this case, no valid certificate of lis pendens was registered "in the registry office in which the claim for lien might have been registered" (s. 24). [18] The effect of a vacating order under s. 28(4) [now s. 29(4)] is to transfer the claim for the lien from the land to the fund of money the owner has placed with the court. In Jenkins v. Wilin Construction Limited (1978), 25 N.S.R. (2d) 19; 36 A.P.R. 19, Judge O Hearn said at page 24: "... the case law shows that the lien is preserved so that the action on the lien is preserved as well as the jurisdiction of the court to deal with the action, but the lien is transferred to the fund in court and the land is released from it." In Lawrence v. Rodgerson the claim for lien was filed. Upon payment into Court the registration was vacated. However the facts disclosed two problems: First, "101 days had elapsed between the time the last work was performed or materials supplied and the commencement of the action" (p. 65) and second, no certificate of lis pendens had been filed. It is evident from these circumstances that pursuant to s. 26(1) of the Act, and in order of priority, the registered lien absolutely ceased to exist on the expiration of ninety days after the work or service had been completed. Even though the registration had been vacated, access to the fund depends upon a sustainable action being commenced within the time provided by the Act. In this case, unlike Lawrence, the action was commenced by Guardian within the ninety days prescribed by the Act. Like Lawrence, however, is the fact that no lis pendens was filed. After reviewing the legislation in Nova Scotia and other provinces and the facts in Lawrence, the Chief Judge wrote at p. 70, para. 27, (77 N.S.R. (2d)): [27] In my opinion the law is clear that once security or money is paid into court under s. 28(4) [now s. 29(4)] of our Act the lien itself is transferred from the lands to the security or money. The lien itself is not vacated, or discharged, only the registration thereof is vacated. The action is still under the Mechanics' Lien Act which creates a statutory right for such a claim. In order to claim against the money in court the claimant must preserve his lien. Under our Act the only way to preserve the lien is to commence an action within the 90 day period and register a Certificate of Lis Pendens although I agree with counsel for the plaintiff that registration of such certificate is really unnecessary under the particular circumstances. In any event, in my opinion, it is a mandatory step to be taken by a claimant in preserving his lien. (underlining added) In C.G. Tech the Chief Judge stated again the position he had taken in Lawrence. He said at p. 386 (para. 7): ... In order to proceed against the lands or the security substituted under the Act a claimant must commence its action and register a certificate of lis pendens. The only alternative to this would be by sheltering ... In C.G. Tech the order vacating the registration of the lien did not occur until after the statement of claim was issued. In that circumstance, s. 26(1) mandates that a certificate of lis pendens is to be registered. However, in this case, the order vacating the registration of the lien was granted prior to the issue of Guardian's statement of claim. There is no doubt that in either case an action must be commenced. The vexing question is whether the intervention of a vacating order under s. 29(4) before the certificate of lis pendens is registered, or in fact is required to be registered, relieves the claimant (Guardian) of the necessity of registering one. Universal Supply is a decision of the British Columbia Court of Appeal. It underlies a fact situation similar to that here under appeal. Upon payment into Court of an amount to cover the lien claims, the trial judge ordered the cancellation of the claims of lien against the lands. He further ordered that the cancellation of the liens "should not deprive the lien claimants of the benefit of the Mechanics' Lien Act, and that the action might proceed under the Act, the moneys in Court being in substitution of the claims of lien against the lands". (p. 252) The appellant, Universal Supply, argued on appeal that the respondents' claim of lien was "bad because it did not file a lis pendens of the action to enforce the lien in the appropriate Land Registry Office within one year as required by ss. 26(1) and 27 of the Act". (p. 252) The head note at p. 251 captures the result: Although s. 26(1) of Mechanics' Lien Act, R.S.B.C. 1960, c. 238, requires the commencement of an action to enforce a lien and the registration of a certificate of lis pendens within one year of the date of filing of the claim for lien, where the amount of the lien is paid into Court the state of the title becomes irrelevant and a certificate of lis pendens need not be registered. Chief Justice Davey in delivering the judgment of the Court of Appeal stated at p. 253: ... Under the particular circumstances of this case, I agree with the learned Judge below that we ought not to construe ss. 26(1) and 27 of the Act to require claimants to go through the abortive motion of filing lis pendens against the lands, when under the order no possible claim against the lands existed, the claims of lien against the lands having been wholly cancelled, and the money in Court fully securing the claims. If a lis pendens were filed under those circumstances it would create a cloud on the title to the land which the owner or purchaser would have to remove, thus partially defeating the purpose of s. 33, which was to enable the owner to deal with the lands free of the charge of the claims of lien. It is useful to refer to the reasoning of the trial judge with which the Court of Appeal in Universal agreed. At trial the case is indexed as Alcock, Downing & Wright Ltd. v. ABA Plumbing & Heating Contractors Ltd. et al. (1971), 23 D.L.R. (3d) 728. Judge Stewart wrote at pp. 736-737: The second agreed issue is as follows: Is the plaintiff, Alcock, Downing & Wright Ltd. entitled to maintain its action although it failed to file a lis pendens pursuant to Section 26(1) of the Mechanics' Line Act? I take the word "file" to mean the word "register". Section 26(1) of the statute reads as follows: 26(1) In every case in respect of which an affidavit of claim of lien has been filed, an action to enforce the same shall be commenced and a certificate of lis pendens in respect thereof registered in the Land Registry Office and in the Mining Recorder's Office in which the duplicate or certified copy of the affidavit has been filed not later than one year from the date of filing of the claim of lien. There is no question that this provision on the face of it is obligatory in so far as the registration of the lis pendens is concerned and it has been so interpreted in at least two cases to which I was referred, and I mention McCoubrey v. Carver Construction Co., Ltd., Woodbury and Woodbury, [1942] 3 W.W.R. 648, 57 B.C.R. 476, and Granby Construction & Equipment Ltd. v. Player (1964), 49 D.L.R. (2d) 658. In the first of those cases Shandley, Co.Ct.J., held [at p. 649] "that the filing of a lis pendens is an absolute enactment and must be fulfilled". No such lis pendens having been filed, he was without jurisdiction, and this finding was approved by Harvey, Co.Ct.J., in the second case. The word "shall" is to be construed as imperative unless there is something in the context or other provisions of the statute in question indicating a different meaning or calling for a different construction. If the statutory provision, obligatory on the face of it makes no sense, and even defeats a purpose of the statute, that provision should be interpreted, if possible, to make sense of the legislation or to be consistent with the purpose of the statute. In neither the McCoubrey case nor the Granby case, was there any suggestion that the obligatory provisions under consideration made no sense or that they in any way defeated the purpose of the statute involved. No special circumstances existed to enable either of the learned Judges mentioned to restrict or limit the imperative nature of the provision requiring the registration of a lis pendens. In this case, however, the situation is significantly different in that pursuant to s. 33 of the Act, the amounts of liens filed at the time of an application made thereunder, including that of Alcock, were paid into Court. In my opinion, the effect of that was to make the land involved and the state of its title of no further relevance to the claim of Alcock. Such payment into Court in no way affected the substantive rights of the parties but was simply a substitution of money in Court for the land as security to the lien claimant: see Davey, J.A. (as he then was), in Nanaimo Constructors Ltd. v. Patterson et al., supra, at pp. 651-2. The registration of a lis pendens in a Land Registry Office can only affect the title to the land involved and accomplishes nothing with respect to money in Court. It not only becomes a meaningless requirement but it, in my opinion, defeats the purpose of s. 33 of the statute which is to enable an owner to clear the title to his land. I think, therefore, that s. 26(1) must be interpreted as obligatory with respect to the registration of a lis pendens in a Land Registry Office only where there is land to be affected. Where there is money in Court under s. 33 there is, in my opinion, no longer any land so far as the lien claimants secured by the money in Court are concerned. It follows that s. 27 must be interpreted in so far as reference is made to the registration of a lis pendens in the Land Registry Office as of no significance unless the land involved still exists for the purposes of the lien claimant, which, in this case, it does not, having been substituted by money in Court. The question expressing this issue is therefore answered in the affirmative. The chambers judge was right when he stated that the reasoning in Universal "is most persuasive". In the circumstances of the first issue in this appeal it is determinative. The objective of the legislation is to provide a means whereby providers of work, services and supplies can receive a measure of protection from financial loss. The legislature determined its objective could best be achieved by a legislative scheme whereby, upon following statutory procedures in a timely way, such claims can attach to the land which is the most valuable asset. The thrust is against the land. It is designed to create an encumbrance and by registration of documents at the Registry of Deeds to warn the world that the title to the land is impaired. Section 26(1) is important to the scheme because it explains how a lien claim will expire unless certain things are done within strict time limits. In the circumstances of this case, S & V Electric/Guardian came within all of the specified time requirements relative to the filing of its claim and the commencement of its action. An intervention occurred on February 7, 1990 and that was as provided by s. 29(4): The registration of the lien claim was vacated by an order of the Court upon Guarantee posting a bond in a principal sum in excess of the amount claimed by Guardian. At that point the thrust of the proceeding changed. It ceased to be a claim against the land. It became a claim against a fund provided by Guarantee. In such circumstances it is well nigh impossible to imagine that the Legislature, by the employment of one of its statutory devices (s. 29(4)), could have intended that the title should continue to be encumbered by a claim that so far the land was concerned, ceased to exist. The land was no longer in peril. Its liability to respond to the claim was transferred to a fund. It was to the fund and not the land that henceforth the action would be pursued. At that point no useful purpose could possibly be served by registering a certificate of lis pendens in the Registry of Deeds. To do so would in fact mislead the world by giving notice of an impediment on the title that did not exist. The purpose of vacation (s. 29(4)) is to clear title so that the owner can get on with its business while at the same time serving the legislative objective of providing security for deserving claimants by another means. Lawrence, on its facts, was doomed to fail. Not so much for the failure to register a certificate of lis pendens but rather because it did not begin its action as required by the Act. A lis pendens was required in C.G. Tech because the statutory filing and registration requirements were not then overtaken by s. 29(4). Those are significant and material differences that do not exist in this case where Guardian did all that the Act required of it. Had Guardian not filed its statement of claim, again within time, it would have been in difficulty under the Act even though the filing took place after the order to vacate was issued by the Court. The order to vacate did not excuse Guardian from the timely issue of its statement of claim to preserve its action against the fund. To require Guardian to register a certificate of lis pendens in those circumstances would by itself create an impediment on the title that s. 29(4) was intended to remove. On the first issue the contentions of the respondents Guardian and Haynes Lally Dalziel should be sustained with the result that Guardian has a valid lien claim. The registration of the certificate of lis pendens was unnecessary. The Second Issue: Sheltering In the Fall of 1989 two other subcontractors, Delaney (Superior Wash) and Municipal Ready Mix, claimed liens against the land. They pursued their claims as required by the Act resulting in Delaney recording his certificate of lis pendens on November 28, 1989 in Book 1634 at p. 588. Municipal did likewise on November 28, 1989 and its certificate of lis pendens was recorded in Book 1634 at p. 593. On December 18, 1989 upon the posting of bonds, court orders were issued. One ordered the vacation of the registration of the lien of Delaney and the second ordered the vacation of the registration of the lien of Municipal. While each order specifically vacated the registration of each lien by book and page, neither specifically referred to the vacation of the registration of each certificate of lis pendens. The court order respecting municipal was registered on December 18, 1989 in Book 1637 at p. 651. That concerning Delaney was also registered on December 18, 1989 in Book 1637 at p. 653. The respective pages at the Registry of Deeds where the Delaney and Municipal certificates of lis pendens were registered were not marked as having been vacated. Later other liens against the job were consolidated by order of the court. The result of all these proceedings was that on January 27, 1990 when the S & V claim of lien was registered in Book 1642 at p. 313, all of the outstanding liens had been either discharged or vacated. The only documents at the Registry not marked as vacated were the two certificates of lis pendens of Municipal and Delaney. On June 17, 1994, the respondent Guardian in the name of S & V filed an affidavit purporting to shelter its claim under the Municipal and Delaney liens. Thus arises the issue whether S & V Electric could shelter under a lis pendens registered in support of a lien claim that had been vacated but not marked as such at the Registry of Deeds. After reviewing and considering the provisions of the Act and decisions including C.G. Tech and Langevin and the decisions considered therein, the chambers judge wrote: .... it is obviously consistent with the spirit of the Act and the obvious intent of the section to permit a claimant, who registers his claim for lien within the time limit of the Act and before a claim for lien and its associated lis pendens are fully vacated, to use the umbrella of the unvacated lis pendens to shelter its claim to recover against a fund specifically paid to secure that claim. Guardian Insurance submits that the claim is sheltered in accordance with the provision of the Act and the explanation of those requirements of the Act as cited above from Macklem and Bristow, supra: the subject lien is preserved in that Delaney, for one, commenced an action and registered a certificate of lis pendens within the time prescribed by the Act for lien registration and that lis pendens has yet to be marked discharged. In some circumstances it is appropriate to respond to a technical objection with a technical answer. I therefore conclude that the lien claim is valid as it is preserved by at least one undischarged certificate of lis pendens. On appeal it is argued by the appellant (Guarantee) that the chambers judge erred in finding that Guardian was entitled to shelter under a certificate of lis pendens after the registration of the claim for lien had been vacated by order of the court. In so doing the appellant submits the chambers judge erred in his application of Langevin. Counsel contends that Guardian cannot shelter under liens that were vacated by the orders of the court on November 28, 1989. Guarantee urges that whereas s. 29(4) does not specifically mandate that the registration of the lis pendens be ordered vacated, there is no obligation to do so when security is deposited with the court. In these circumstances counsel says Guardian could not successfully shelter because the umbrella claim for lien had already been vacated before Guardian attempted to shelter. The respondents argue that the registration of the certificate of lis pendens and not the lien "triggers the protection of s. 26(1) of the Act". They rely, among others, on the comments of this court in Langevin and in particular at p 335: Once a claimant has registered a lien, others who come within the Act are able to advance their claims without the necessity of commencing separate actions. They are able to shelter under the first claimant who commenced an action and registered a certificate of lis pendens. Also at p. 335: To obtain the protection of the Act, those who seek to shelter must comply with its strict provisions. There must be a certificate of lis pendens in the proper registry office. And at p. 340: The position adopted by Judge O Hearn in McLanders is consistent with the provisions of the Act and can be supported on sound policy grounds. The class action nature of proceedings under the Act is maintained. No violence is done to the continuing notion that the Act is designed to prevent a multiplicity of actions. By conducting a search of the proper registry a potential lien claimant who locates a certificate of lis pendens can protect his lien right by the appropriate filing before the action is settled or the registration of the lis pendens is vacated pursuant to s. 28(4) [now 29(4)]. In this way a lien claimant who acts in a timely fashion is able to shelter. Sheltering is a process that still exists in Nova Scotia. In Langevin the Court wrote at p. 335: Once a claimant has registered a lien, others who come within the Act are able to advance their claims without the necessity of commencing separate actions. They are able to shelter under the first claimant who commenced an action and registered a certificate of lis pendens. Macklem and Bristow, supra, write at page 263: In Nova Scotia and Saskatchewan a claimant's lien will be preserved if an action is commenced and a certificate of action is registered by another lien claimant against the same property within the time prescribed by the Act for the registration of his lien. In such circumstances the claimant can 'shelter' under the action which has already been commenced, and it will not be necessary for him to register a claim for lien of his own: N.S., s. 24; Sask. s. 37. In Langevin the Court said that once a fund is established and a vacating order has been issued, the class of those who can assert their claims against that particular fund is closed. Sheltering by other claimants then unknown should not be permitted to claim against the fund which underlies the grant of the vacating order. Otherwise it would be unfair to and prejudice the rights of those claimants who in good faith have agreed to permit their claims to be vacated upon security or funds being placed with the Court. The process permitted by s. 29(4) makes good sense: It protects the claimants and for the owner, it frees the land of its encumbrances. As the Court stated in Langevin at p. 340: ... Once vacated, the class of lien claimants established prior to the vacation has a continuing action against the fund, but not the land, because the lis pendens has ceased to be registered against the land. Vacation is a means of discharging liens against land by transferring the actions by which they were commenced to the security provided or the fund of money paid into court. The appellant argues on appeal, as it did before the chambers judge, that once the registration of the underlying claim for lien has been vacated, Guardian is not able to shelter under a lis pendens which still happens to be registered. A significant decision in this respect is the unanimous decision of five members of the Manitoba Court of Appeal in Northern Electric Co. Ltd. v. Frank Warkentin Electric Ltd. et al. (1972) 27 D.L.R. (3d) 519. Lien claimants were attempting to maintain claims against land by sheltering under a lis pendens which had not been discharged. The Court decided that after security was posted and the initial claim was vacated, a continuing and undischarged lis pendens became meaningless. Relevant is the following excerpt from the decision of Mr. Justice Dickson, as he then was, at pp. 527 and 528, (also quoted in Langevin with approval at p. 337): The purpose of s. 25(2) is obviously to clear the title of lien claims, by permitting an applicant to pay money into Court to secure the claims. The money then stands in place of the property: Bank of Montreal v. Township of Sidney, [1955] 4 D.L.R. 87, [1955] O.W.N. 581. Registration of the liens is vacated, but the lien claims must still be established: Pedlar People Ltd. v. McMahon Plastering Co. Ltd. (1960), 33 W.W.R. 47. It would seem consistent with the spirit of the Act and, in particular, the obvious intent of s. 25(2), that if a mortgagee or owner clears title by (a) paying the claims of some lien claimants, and (b) paying into Court an amount sufficient to meet all other registered claims for lien, then, such mortgagee, in the absence of notice in writing of any unregistered lien claim, is free to make mortgage advances to the mortgagor or his order, secure in the knowledge that lien claimants who have neither registered nor given notice up to that date will not later gain priority over the advances. The Act does not, in my view, give lienholders the right to claim in priority back to the date of filing of a lien which was discharged or vacated from the title prior to registration of the lien in respect of which priority is claimed. Any other interpretation would make s. 25(2) meaningless. What about the lis pendens? It was registered by Northern Electric prior to the application to pay into Court. It is still against the title because the action commenced by Northern Electric to establish its claim is still continuing. If lien claimants cannot obtain priority over mortgage advances by attempting to relate to mechanics' liens, registration of which was vacated, they cannot achieve the same result by trying to relate to a lis pendens; there is simply nothing to relate to. Northern Electric does not have any claim against the lands in question here. Suppliers who filed liens which were later discharged do not have any claim against these lands. If none of these has a claim, a fortiori no one claiming through or under or in association with or by virtue of, them has a claim. ... It appears from examining the record in this case that the chambers judge did not have before him copies of the orders vacating the lien registrations of Municipal and Delaney. Each was issued on December 15, 1989. These were available to this Court and counsel at the hearing of the appeal. The order relating to Municipal reads in part as follows: AND UPON IT APPEARING that Rocca Construction Limited is prepared to post a bond from the Guarantee Company of North America in the amount of Twenty-Seven Thousand Six Hundred and Twelve Dollars and Twenty-Nine Cents ($27,612.29), inclusive of costs, a copy of which is attached to this Order, to the Clerk of this Honourable Court to stand in place of the lands covered by the Claim for Lien without an admission of liability to Municipal Ready Mix Limited; AND UPON MOTION; IT IS ORDERED that the registration of the Claim for Lien recorded by Municipal Ready Mix Limited at the Registry of Deeds office at Sydney, in the County of Cape Breton, Province of Nova Scotia, in Book 1632 at page 210 be and is hereby vacated pursuant to Section 25, subsection 4, of the Mechanics' Lien Act; To like effect is the order relating to Delaney (Superior Wash Systems) which in part, follows: AND UPON IT APPEARING that R & F Masonry Contractors is prepared to post a bond from the Canadian Surety Company of North America in the amount of $3,665 to the Clerk of this Honourable Court, a copy of which is attached hereto, to stand in place of the lands covered by the Claim for Lien without an admission of liability to Superior Wash Systems; AND UPON MOTION; IT IS ORDERED that the registration of the Claim for Lien recorded by Superior Wash Systems at the Registry of Deeds office at Sydney, in the County of Cape Breton, Nova Scotia, in book 1631 at page 267, be and is hereby vacated pursuant to Section 25(4) of the Mechanics' Lien Act; A metes and bounds description of the land sought to be encumbered by each claim is attached to each order. The reference in each order to s. 25(4) of the Act appears to be an inadvertent typographical error: The section equivalent to 29(4) in the present Act was s. 28(4) in R.S.N.S. 1967, c. 178. It will be noted that in neither of these orders is there a paragraph which specifically discharges the registration of the lis pendens. Undoubtedly the absence of such a provision accounts for the administrative failure to enter a notation of discharge on the lis pendens at the Registry of Deeds. In discussion with counsel during the hearing of the appeal the Court was told that more often than not when drafting such orders it is usual to provide that the certificate of lis pendens is also discharged. Does the lack of such a provision furnish this certificate of lis pendens with sufficient continuing vitality to permit a shelterer to take refuge and claim against the fund Guarantee has provided by its bond? Let us return to s. 29(4): Upon application, the court or judge having jurisdiction to try an action to realize a lien, may allow security for or payment into court of the amount of the claim, and may thereupon order that the registration of the lien be vacated or may vacate the registration upon any other proper ground and a certificate of the order may be registered. The section bears an analysis against the factual backdrop of this case. First, there was an application by each of Municipal and Delaney. Second, Judge (now Justice) S. J. MacDonald had the jurisdiction to try an action to realize a lien. Third, he exercised his discretion to allow security into court for the amount of each lien. Fourth, he ordered that the registration of the lien be vacated. Fifth, and last, he ordered that a certificate of each order be registered. In short, there was full and complete compliance with s. 29(4). What was left were two registered certificates of lis pendens that had ceased to have any effect under the Act. They were "meaningless" to use descriptive language of Dickson, J.A. in Northern Electric. They were of no use to the parties because their pursuit was no longer to the land. They were now chasing a fund. It would be impractical, unfair, prejudicial and unreasonable to leave the fund which the parties had established in good faith and with the approval of the Court to the claims of unknown shelterers relying upon a lifeless lis pendens that for all intents and purposes had ceased to have any legal effect. The inescapable conclusion must be that when s. 29(4) is invoked and the lien is vacated, so also is the validity of its lis pendens for the purpose of sheltering. Langevin sought not to abolish sheltering but rather to close the class of those who could claim against the fund after a vacating order was issued by the Court. In Langevin, as earlier recited, the Court said at p. 340: ... By conducting a search of the proper registry a potential lien claimant who locates a certificate of lis pendens can protect his lien right by the appropriate filing before the action is settled or the registration of the lis pendens is vacated pursuant to s. 28(4) [now 29(4)]. In this way a lien claimant who acts in a timely fashion is able to shelter. These comments were premised on an action that had not been settled or the registration of the lien claim had not been vacated by court order as is provided by s. 29(4). The words "lis pendens" were used in Langevin because as confirmed in the discussions with counsel during this appeal the usual practice is to provide in the order that the registration of the lis pendens will also be vacated. So it was in the vacating order Justice Anderson issued in Langevin. The facts underlying this case differ from Langevin in that the order of the Court did not specifically provide for the vacation of the registration of the certificate of lis pendens. The variation of fact prompts an analysis of the reliance that can be placed on a lis pendens which continues to reflect its registration while the claim from which it flows has ceased to be effective for any purpose in law except historical record. The fact driven circumstances of this case cause the Court to revisit the suggested reliability of the continuing registration of a certificate of lis pendens for sheltering when by s. 29(4) its underpinning is no longer buttressed by an action that reflects a potential claim against the land. In the light of the further analysis which the facts in this case prompt, it is more accurate to vary the language in Langevin by saying "... or the registration of the lien is vacated pursuant to (now s. 29(4))". The circumstances giving rise to this appeal provide cause to ponder whether the continuing requirement of the registration of a certificate of lis pendens serves any useful purpose in the business community. That, however, is not a subject upon which this Court should or can pass judgement. Suffice to quote that which the authors of Construction Builders' and Mechanics' Liens in Canada (6th Ed.,), Macklem & Bristow write at p. 7-36: It is now no longer necessary in Ontario to register a certificate of action where an order to vacate the registration of a lien has been made: s. 44(9). Until the former Mechanics' Lien Act was amended in 1970, the section only dispensed with the registration of the certificate of action if the order had been made under clause (a) of section 29(2), directing payment of the whole amount of the lien into Court. The decision in Friedman v. Stanton, [1966] 2 O.R. 59 (M.C.), is accordingly no longer law in Ontario. The lien claimant must still commence his action to enforce the lien within the time prescribed by the Act, however: Re Chimo Lbr. Ltd. and Abode Two Ltd. (1978), 18 O.R. (2d) 691 (Div. Ct.). Section 27(3) of the Newfoundland Act, section 51 of the Manitoba Act, sections 32.1 and 32.2(2) of the Alberta Builders' Lien Act, section 25(2.1) of the British Columbia Builders' Lien Act, section 57(3)(b) of the New Brunswick Mechanics' Lien Act, and sections 56(7) and 57(5) of the Saskatchewan Act also dispense with the registration of a certificate of action or of a lis pendens where an order is made vacating the claim for lien before the action is commenced. In Nova Scotia, the claim for lien was dismissed where it had been vacated upon payment into Court of the amount of the lien because the claimant had not commenced the action or filed the requisite lis pendens within the time prescribed by the Act: Lawrence v. Rodgerson (1986), 77 N.S.R. (2d) 64(Co. Ct.). See also C.G. Tech Ltd. v. Cornwallis Realties Ltd. (1991), 44 C.L.R. 68 (N.S. Co. Ct.). And continuing at p. 7-37, the authors state: In Universal Supply Co. v. S. Radatske Const. Co. (1972), 29 D.L.R. (3d) 251 (B.C.C.A.), it was held that, where the lien is cancelled upon payment of security therefor into Court, under the corresponding section of the British Columbia Act, it is not necessary to register the certificate of lis pendens required by section 26(1) [now s. 25(1)] of that Act, since the state of the title is no longer relevant. This decision was approved in Re Van Horne Elec. Ltd. (1977), 2 B.C.L.R. 71 (C.A.), where the Court held that, once the lien had been cancelled under this section, a certificate of lis pendens could not be filed against the land because the lien would be nonexistent. Section 25(2.1) was added to the British Columbia Act in 1984 to codify the law in this respect. On the second issue, for the reasons given, the conclusion is that the certificate(s) of lis pendens did not permit Guardian to shelter thereunder. Disposition The respondent Guardian succeeds because it has a valid lien under the Mechanics' Lien Act. Its validity is achieved under the provisions of the Act and not by sheltering. The contention of Mr. Lally of Haynes Lally Dalziel should be sustained. Although the reasons are varied from those given by the chambers judge, the result is the same. The appeal should be dismissed. The respondents, being such of them as are awarded costs following the order issued by the chambers judge, should be awarded 40% of the same on this appeal. C.J.N.S. Concurred in: Matthews, J.A. Chipman, J.A.